Thai households in the third quarter of this year are found to have greater debts and less ability to repay their debt, according to Office of the National Economic and Social Development Board (NESDB).

NESDB deputy secretary-general Suwannee Kamman cited statistics from the Bank of Thailand (BoT) that outstanding debts for personal consumption totalled Bt2.74 trillion, up 20.4 per cent year-on-year and also consecutively higher than those in this year's first and second quarters, partly as a result of household spending stimulated by the government's 'first car' and 'first home' schemes.

Personal consumption debts for cars and motorcycles reached the highest figure of 33 per cent, while for other types of consumption at 30 per cent and for loans for buying homes at 10 per cent.

Ms Suwannee said the public's ability to repay their debts decreased as seen by non-performing loans (NPL) from personal consumption loans which increased 25 per cent, or Bt56 million in value, or counting as 21 per cent of overall NPLs.

Meanwhile, outstanding personal debts whose holders failed to make payments for more than three months increased 37 per cent or Bt7.3 billion, while credit card loans with debts failing to be paid for more than three months grew 11 per cent.

Ms Suwannee concluded from these figures that Thai households' spending behaviour is worrisome and should be monitored particularly among those low- and middle-income earners who tend to spend their money in response to social values and advertisements.

The Thais are deeper in debt because they spend like drunken sailors and have little regard for tomorrow or its consequences. They have a cargo cult mentality by and large and are surrounded by lots of avaricious others who are only too happy to happy to foster their desires which are daily spelled out on the crappy and fantasy riddled soapie shows!

I'm assuming that police are included in the definition of "Civil Servant", but maybe not. Regardless, I can see where problems like this would eat on an employees mind and affect their motivation and work performance, as well as tempting them to be corrupt. The last thing Thailand needs is for its bureaucracy to start to fall apart. There would be chaos. Pete

Debt among civil servants has worsened, with the average amount of arrears more than 22 times greater than their average income, a survey by the National Statistical Office has shown.

The results of the survey, which is conducted every two years, were reported to the cabinet yesterday, deputy government spokesman Pakdiharn Himathongkham said.

The average amount of civil servants' household debt in 2008 was 18.2 times their average income, he said. This ratio grew to 20 in 2010, and last year's figure was 22.3 times their average income.

The survey results were based on information randomly collected last year from 13,252 civil servants who represented state employees of both sexes and at all levels and incomes in all parts of the country, Mr Pakdiharn said.

About 83% of the civil servants surveyed have debts, he said, with an average debt of 1,111,425 baht per household.

The rise in debt proportion was despite an increase in the average household income, Mr Pakdiharn said. In 2008, the average income was recorded at 41,139 baht per month per family, while in 2010 it was 43,650 baht, and last year 49,915 baht.

The largest proportion _ 83% _ of civil servants' monthly incomes came from their salaries and position allowances, followed by personal business (9.4%), interest and dividends (3.87%) and overtime allowances (2.3%).

Some 20.6% of the civil servants's spending went on food and beverages, while travelling and communication services accounted for 15.1%. Another 9.2% was spent on personal expenses such as for buying new outfits.

The largest proportion of the debts (54.7%) was found to be home loans, while 16.5% of the debts were from loans for buying or repairing cars. Personal loans made up another 15.4%, while 5.9% was loans sought to invest in family businesses, and the remaining 3.6% was from educational loans, according to the survey.

The further up the ranks the civil servants were, the less likely they were to be in debt, the survey found.

As many as 86.3% of the lowest category of civil servants were indebted, compared to only 31.9% in the highest-level group of civil servants, the survey said.

Governments are instituted among Men, deriving their just powers from the consent of the governed. Source

Are these debts really representative? I personally don't really include reasonable borrowing for home purchase as a serious problem. These agreements are usually repaid over many years, and can often equate to no more than monthly rent - certainly after the first few years, repayments balance out nicely to the extent that they become less than rent.

Most of us have had a mortgage around our necks at one time or another. This will always push your borrowing high. If mortgages are included, then average debts of just over 1M Baht are quite reasonable in my opinion - certainly nothing to make headline stories.

charlesh wrote:The Thais are deeper in debt because they spend like drunken sailors and have little regard for tomorrow or its consequences. They have a cargo cult mentality by and large and are surrounded by lots of avaricious others who are only too happy to happy to foster their desires which are daily spelled out on the crappy and fantasy riddled soapie shows!

What's new pussycat?
It's human nature the world over!
UK no better, good ol' USA even worse!
Stop the whingeing and get on and enjoy the good life while you can.

Are these debts really representative? I personally don't really include reasonable borrowing for home purchase as a serious problem.

Yes, that's exactly what I was thinking, for instance, if more dept was the result of more people being in the situation to take on mortgages and buying houses instead of renting, it could be a good thing rather than negative.

Household debt hits record
Debts in the home jumped to a new high reflecting the rising cost of living and school payments, a survey by the University of the Thai Chamber of Commerce showed on Tuesday.

The Economic and Business Forecasting Centre of the university said the average household debt stood at 188,774 baht, up 12% in one year from 168,517 baht, and the highest level since the UTCC began the survey in 2008.

Families with income of under 5,000 baht a month led all groups in making new debt, fully half of it resulting from loans by loan sharks, followed by households with the monthly income of between 5,000 and 15,000 baht, it added.

The centre said 23% of respondents pointed to the higher cost of living as the main reason for growing debt, while 22% said they needed cash to pay for school tuition, followed by home mortgage payments.

Thanavath Phonvichai, the centre director, said the results signal an economic downturn, as consumer purchasing power dwindles because of the high prices of goods. The two-digit increase of household debt was an alarming sign for the Thai economy, he added.

Consumers are likely to slow their spending for a few months, at least until the final quarter of the year, unless the government launches stimulus measures, he added.

The survey sampled 1,200 households across the country from June 18-23.

Household debt keeps Thailand Southeast Asia's sick man
Sinking in heavy repayments to loan sharks, Non says payday is nothing more than a cruel reminder of his dire finances.
Household debt has surged to alarming levels in Thailand; just one of a welter of issues dragging on the economy despite a vow by the ruling junta to revive the kingdom’s fortunes.

"I have more outgoings than income," Non, a 37-year-old tyre factory worker tells AFP from his modest family home on the outskirts of Bangkok.

Thai households are among the region’s biggest borrowers, a credit binge stoked by populist policies and low bank interest rates -- but also low wages that keep the poor perilously close to the breadline and make them ready bait for illegal loan sharks.

The debt levels are worrying the generals who seized power last May promising to end a near-decade of political turmoil and restore zip to Thailand’s once-dynamic economy.

The country narrowly avoided recession during protests against the ousted administration of Yingluck Shinawatra, which paralysed government spending and frightened off tourists and investors.

Nine months after the military power grab, signs of economic recovery are still few with fourth quarter GDP figures, to be released on Monday, expected to come in at around 0.8 per cent for 2014.

There is some good news, with tourism arrivals bouncing back despite martial law, and exports -- which account for around 60 per cent of the economy -- showing a slight improvement.

Yet two key Thai commodities -- rice and rubber -- are currently at record low prices and the country is flirting with deflation.

And with the political outlook still uncertain, consumer confidence remains depressed as Thais hold off from buying flats, cars and durables.

There is a certain 'live for today' culture that thrives here and little thought is given to the vagaries of the future. The thirst for a modern western lifestyle and accessories leads many into a pit from which they cannot escape and were foolish to even contemplate entering it with no chance of seeing light at the end of the tunnel.

Problem is, in places like Thailand that compounds the issue out of all proportion is the informal lending market (loan sharks) and there is a figure in every estate, slum or street corner willing to lend with merciless interest rates preying on the deluded and weak.

And, on top of all that there has been a lot of irresponsible lending from the government and high street banks too. An avoidable mess that has no-one else to blame than themselves....no sympathy from me on this one. I live within my means but wish I could have more money......however, borrowing it is NOT the answer and never will be.

Let's not delude ourselves that reckless borrowing is limited to Thais, people in the west (the UK as a prime example in the 70/80/90's) were only to willing to get themselves into debt caused by banks being too free and easy with lending and the resultant hike in interest rates causing 100's of thousands to lose their homes. Even today, the likes of Wonga prey on those who cannot control their urge to live beyond their means.